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Aluminium
for the world
INVESTOR RELATIONSPRESENTATION
Q1 2019
DISCLAIMER
2
This document has been prepared and issued by and is the sole responsibility of Aluminium Bahrain B.S.C. (the“Company”). The document is being supplied to you solely for your information and for use at the Company’s presentation.No information made available to you in connection with the presentation may be passed on, copied, reproduced, in wholeor in part, or otherwise disseminated, directly or indirectly, to any other person. This document and its contents aredirected only to the intended audience. It is being made on a confidential basis and is furnished to you solely for yourinformation. By accepting this material the recipient confirms that he or she is a relevant person. This document must notbe acted on or relied on by persons who are not relevant persons. Any investment activity to which this document relatesis available only to relevant persons and will be engaged in only with relevant persons. If you are not a relevant person youshould not attend the presentation and should immediately return any materials relating to it currently in your possession.Forward-looking statements speak only as at the date of this presentation and Aluminium Bahrain B.S.C. expresslydisclaims any obligations or undertaking to release any update of, or revisions to, any forward-looking statements in thispresentation. No statement in this presentation is intended to be a profit forecast. As a result, you are cautioned not toplace any undue reliance on such forward-looking statements. You should not base any behaviour in relation to financialinstruments related to the Company’s securities or any other securities and investments on such information until after it ismade publicly available by the Company or any of their respective advisers. Some of the information is still in draft formand has not been legally verified. The Company, its advisers and each of their respective members, directors, officers andemployees are under no obligation to update or keep current information contained in this presentation, to correct anyinaccuracies which may become apparent, or to publicly announce the result of any revision to the statements madeherein except where they would be required to do so under applicable law, and any opinions expressed in them are subjectto change without notice. No representation or warranty, express or implied, is given by the Company, its undertakings oraffiliates or directors, officers or any other person as to the fairness, accuracy or completeness of the information oropinions contained in this presentation and no liability whatsoever for any loss howsoever arising from any use of thispresentation or its contents otherwise arising in connection therewith is accepted by any such person in relation to suchinformation.
Aluminium
for the world
3
01IndustryHighlights
CONTENTS
02ALBAHighlights
03Q1 2019Results
04IndustryPerspectivesin 2019
052019ALBA Priorities
Aluminium
for the world
01INDUSTRY HIGHLIGHTS1
1Industry Highlights are based on CRU analysis
Aluminium
for the world
World consumption almost flat (~1% YoY)
MENA demand up by 8% YoY mainly driven by major infrastructure spending in KSA (+20% YoY)
Economic headwinds in Europe tighten metal demand (+2% YoY)
North America demand up by 1% YoY supported by auto production
Slowdown in construction and weak auto demand weigh on Chinese consumption (flat growth)
Aluminium
for the world
5
Global Physical Demand Grow Modestly
Industry Highlights – Q1 2019
Chinese new capacity ramp-up gains momentum with 2% YoY
10% tariff on aluminium imports was behind the progressive smelters’ restarts in North America (+7% YoY)
World market in surplus with China (+278 Kt) and in deficit w/o China (-571 Kt)
Aluminium
for the world
6
Global Production - Modest Growth at +1.5% YoY
Industry Highlights – Q1 2019
LME inventories at ~1.1 million MT as of March-end (down by 14% YoY)
LME-Cash averaged US$1,859/t - down by 14% YoY [lowest: US$1,776/t on January 14 and highest: US$1,923/t on March 20]
Physical premium prices under pressure ($/t):
Aluminium
for the world
LME & Premiums
7
Major Japanese Ports (MJP) US Midwest DDP Rotterdam
0
225
Q12018
Q22018
Q32018
Q42018
Q12019
168202
158134 137
0
250
500
Q12018
Q22018
Q32018
Q42018
Q12019
305
480 455 485 507
0
75
150
Q12018
Q22018
Q32018
Q42018
Q12019
103129 132
10385
Industry Highlights – Q1 2019
Aluminium
for the world
8
384
526 540
441
386
300
400
500
600
Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019
2,159
2,259
2,0561,968
1,859
1,700
1,900
2,100
2,300
Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019
Alumina Price Index Trend (US$/T)
LME Price Trend (US$/T)
Alumina Price Still High - 21% of LME Price
Industry Highlights – Q1 2019
Aluminium
for the world
02ALBA HIGHLIGHTS
Continuous improvement in Plant Safety with the launch of ‘Safety Gateway’ Campaign
Sales volume up by 2% YoY (257,113 mt) and production up by 5% YoY (272,707 mt)
Alba Value-Added Sales averaged 52% of total shipments in Q1
Line 6 Expansion Project Milestones:
- Line 6 Smelter: 50% of Line 6 capacity in full operation (212/424) by
18 April 2019
- Line 6 Smelter’s Overall Progress advanced by > 88%
- Power Expansion Project [PS5 > 89% & PDS > 97%]
Aluminium
for the world
Operational Highlights & Achievements
10
Alba Highlights – Q1 2019
11
2
5
8
2015 2016 2017 2018 Q1 2019
6
3
6
30 0
35
70
2015 2016 2017 2018 Q1 2019
69 6457
32
6
Lost Time Injury (LTI) Trend Total Recordable Injuries
Aluminium
for the world
Safety in Focus - Safety Gateway
Alba Highlights – Q1 2019
EBITDA squeezed by lower LME prices and historically high Alumina prices
Q1: US$ 7 million down by 94% YoY
Net Loss driven by lower EBITDA levels
Q1: US$ 42 million down by 147% YoY
Free-Cash Flow 1 driven by higher maintenance CAPEX and unfavourable working capital
Q1: (US$ 25 million) down by 119% YoY
Aluminium
for the world
12
1 Free Cash Flow excluding Line 6 CAPEX spending
Financial Key Performance Indicators
Alba Highlights – Q1 2019
Aluminium
for the world
13
AchievedQ1 2019
Target2019
Target2020
9
40
60
Project Titan - US$ Million
Project Titan - Phase IV: Improve Cash-Cost Structure by US$ 100M by end of 2020 [2019: US$ 40M & 2020: US$ 60M]
Alba Highlights – Q1 2019
03Q1 2019 Results
Aluminium
for the world
15
Sales Bridge Analysis Q1 2019 vs. Q1 2018 Unfavourable LME Prices Partially Offset by Higher Sales’ Volume
250
450
650
Metal Sales1Q18
LME Product Mix Pricing Power Volume Metal Sales1Q19
596526
13
81
2 0
Q1 2019 vs. Q1 2018 - Metal Sales Bridge (US$M)
Aluminium
for the world
Q1 2019 Results Aluminium Industry: Bearish Economic Sentiment & Lower LME Price
Favourable Sales’ Volume & Sustained Up-Charges
16
Q1 2019 vs. Q1 2018Sales by Product-Line Bridge (MT’000)
Premium Above LME Trend US$ Per MT
100
200
1Q18 1Q19
199 192
Aluminium
for the world
100
200
300
Sales1Q18
ValueAdded
LiquidMetal
Commodity Sales1Q19
252 257
25137
Q1 2019 Results Aluminium Industry: Bearish Economic Sentiment & Lower LME Price
17
Q1 2019 vs. Q1 2018 - Direct Cost Bridge (US$M)
Aluminium
for the world
250
400
550
Direct CostQ1 2018
RMPrice
RMConsumption
EnergyPrice
OtherRM
AluminaSales' Cost
InventoryChange
PlantSpending
Direct CostQ1 2019
460499
2324
811 4 18
5
Q1 2019 Results Aluminium Industry: Bearish Economic Sentiment & Lower LME Price
Cost Analysis Q1 2019 vs. Q1 2018
18
Q1 2019 vs. Q1 2018 - EBITDA Bridge (US$M)
0
75
150
EBITDAQ1 2018
MetalSales
OtherSales
DirectCost
SellingExpenses
EBITDAQ1 2019
126
7
70
4
39
6
EBITDA 20.9%
EBITDA 1.3%
Aluminium
for the world
Q1 2019 Results Aluminium Industry: Bearish Economic Sentiment & Lower LME Price
Adjusted EBITDA Bridge Gap Analysis - Q1 2019 vs. Q1 2018 Adjusted EBITDA Margin at 1.3%
Aluminium
for the world
19
4Q18 to 1Q19 Cash-Flow Bridge (US$M) Free Cash-Flow (US$M)
-35
0
35
70
105
140
1Q2018
1Q2018
134
-25
Operating & Investing Cash Flow(Excluding L6 CAPEX)
0
150
300
CashBalance
4Q18
CFfrom
Operations
WCChanges
CAPEXSpent
Line 6Capex
LoanDrawdown
Paymentto
Shareholders
CashBalance
1Q19
276
155
7 428
252
156
0
Q1 2019 Results Aluminium Industry: Bearish Economic Sentiment & Lower LME Price
Cash Flow Bridge – Q4 2018 to Q1 2019
20
Financial Summary Q1 2019 Q1 2018
Average Cash LME (US$/MT) 1,859 2,159
Average Alumina Price (US$/MT) 386 384
Alumina Price/LME Price 21% 18%
Sales (US$M) 527 600
EBITDA (US$M) 7 126
EBITDA% 1.3% 20.9%
Net Income/ (Loss) (US$M) (42) 90
Aluminium
for the world
Q1 2019 Results Aluminium Industry: Bearish Economic Sentiment & Lower LME Price
Q1 2019 Highlight: Lower LME Price & Historically High Alumina Price Continue to Weigh on Alba Profitability
04INDUSTRY PERSPECTIVES IN 2019
Aluminium
for the world
22
Key factors to be observed:
Despite a deficit market, LME volatility will continue on the back of weak economic growth landscape in Europe and China as well as trade-tensions between US-China
Premiums to remain under pressure post lifting Rusal sanctions
Demand in North America remains upbeat led by automotive and aerospace markets
LME price to rise within 2nd half of 2019 in the range of US$1,900/t -US$2,000/t
Aluminium
for the world
Industry Perspectives in 2019
Global Physical Demand to Remain Healthy [~4% YoY]
Industry Perspectives in 2019
23
Alumina spot prices to soften on the back of EGA Refinery ramp-up and assuming Alunorte refinery will resume full production in the 2nd half of 2019
Green Petroleum Coke (GPC) & Liquid Pitch prices to remain at the lower range due to weak market demand for the former and market oversupply for the latter
Aluminium Fluoride price to soften on the back of lower Alumina prices
Aluminium
for the world
Raw Materials Price Trends
052019 ALBA PRIORITIES
Aluminium
for the world
25
Aluminium
for the world
2019 Alba Priorities
Sustainable Improvement & Preparation for Line 6 Full Production
Continued Focus on Safety ‘Launch Safety Gateway Campaign’
Deliver on Project Titan - Phase IV [US$ 40 million by end of 2019]
Focus on Value-Added Sales
Develop upstream opportunities on Alumina
Complete Line 6 ramp-up safely in early Q3 2019
26
Alba4World alba4world user/Alba4World photos/alba4world
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